Create a fund to guarantee the debt of school districts in
accordance with statute;

Allow the state to guarantee the debt of school districts and
guarantee debt incurred to refund school districts bonds;

Provide that the state's obligation under any debt guarantee
shall not be considered debt for purposes of the state
constitution; and

Allow the legislature to provide by law that reimbursement to
the state shall be obtained from moneys that would be used for
educational support from the state to the school district which
incurred the debt and which is being guaranteed by the state.

Effect of Adoption:

The repayment provisions should substantially decrease
interest rates on bonds issued by school districts for
construction of new buildings because it would provide eligible
school districts a rating of "AAA" for its bonds on the
bond market. The repayment provisions would only be applicable if
a local school district passes a bond issue and then does not
make payments to the bond holders from its property tax proceeds.
The school district will still be liable in the event of a
default. The amendment would not affect the current
constitutional requirement that two-thirds of the votes cast for
a bond proposal are needed for it to be adopted.